Hello again from the Lounge, especially to all of our new readers from India.
Big Tobacco twice succeeded, spending tens of millions of dollars in the process, in having cigarette tax increase measures beaten back in California. The industry also for many years had successfully lobbied the California State Legislature from increasing cigarette taxes. Well, in November 2016, Big Tobacco finally lost, as Californians passed a whopping $2 a pack increase by a large margin.
That jacked up California’s cigarette tax from 87 cents a pack — one of the lowest in the nation — to $2.87 a pack, one of the highest in the nation.
Big Tobacco REALLY cared about California, which at first I thought was a little weird because California had a pretty low smoking rate even before the tax increase. Then, I thought about it … while California has one of the lowest smoking rates in the nation, it also still has 38 million people, so 10 percent of say 30 million smoking-age residents of California, is still 3 million smokers, spending an average of say $1,000 a year on their habit, which adds up to $3 billion a year.
Then, I saw why Big Tobacco was willing to spend tens of millions to defeat tax increases in California, because everyone knows higher tobacco taxes are one of the most effective ways to encourage people to quit — and to encourage teens not to start to begin with. Big Tobacco spent a staggering $71 million to try and defeat the 2016 measure. Their effort finally failed.
Well, Philip Morris is trying a new (actually, not so new) tact to undermine California’s cigarette tax increase … discount coupons to smokers in California.
Again, with $3 billion in revenue at stake, it’s worth Big Tobacco’s while to take a bit of a bath on discounts.
From a New York Times article:
“The hope is that by buffering the price shock, fewer people will quit,” said Stanton Glantz, a professor of medicine at U.C. San Francisco whose research focuses on tobacco.
In 2014, the tobacco industry spent more than $5 billion — nearly two-thirds of its entire marketing budget — on discounts passed along to consumers, according to a government report.
At $2.87 a pack, the cigarette tax threatens to further erode (California’s) customer base. Reports have suggested that some smokers have already quit.
Cigarette taxes play a “huge” role in smoking rates, said Ilana Knopf, director of the Public Health and Tobacco Policy Center at Northeastern University Law School in Boston.
“And of course the industry knows that,” she said, “so they do whatever they can to counter those policies.”
In the short term, it might work a bit, but in the long run, Big Tobacco will have to give up on California, where the smoking rate will surely drop because people won’t want to pay $2.87 a pack.
Sacramento Bee editorial on tobacco taxes
This editorial printed this week suggests that the $1 billion a year expected to be generated from California’s cigarette tax could balance some of the cuts the state might see from Republicans in D.C. trying to cut federal funding for health care.
Lost in all the hubbub over this election (and a reason why I waited a week and a half to post about it) was California voters approving a $2 a pack increase in their cigarette tax.
California will go from having one of the lowest cigarette taxes in the country at $0.87 a pack to $2.87 a pack. Big Tobacco spent tens of millions to defeat prior attempts at raising California’s cigarette tax (in fact, a 2012 measure failed literally 49.9 percent to 50.1 percent), but this time it failed.
According to Salon, Big Tobacco spent $71 million to defeat the California measure, which was approved with 63 percent of the vote. California has one of the lowest smoking rates in the country at about 10 percent, so why would Big Tobacco care? Because that’s 10 percent of 38 million people — basically about 3 million adults.
It’s estimated (and studies have backed this up) that raising the cigarette tax by $1 a pack cuts the smoking rate by about 10 percent. So a potential 20 percent cut in those 3 million smokers (that’s 600,000 smokers), each of them no longer spending roughly $1,000 a year on cigarettes? You can see why Big Tobacco cared.
The Salon article claims this measure will cost Big Tobacco $250 million a year in lost sales (at least, that’s roughly a loss of 250,000 smokers). A drop in the bucket for Big Tobacco, but enough to get their attention.
Big Tobacco was able to defeat similar measures in Colorado and North Dakota, where health agencies didn’t have that much to spend against the industry. In California, health agencies spent $36 million to offset the industry’s $71 million.
Big Tobacco killed similar tax proposals in Colorado ($1.75 a pack; 46 percent yes) and North Dakota (44 cents; 45 percent) by outspending proponents by a factor of six.
The lesson: You don’t have to spend as much as the tobacco industry, but you need enough money to get your message out.
As an aside, California also approved legalizing pot, as did Nevada, Maine and Massachusetts. The Salon article goes on at length about the danger of Big Tobacco moving into the pot industry, something I’ve written about extensively in the past and don’t need to rehash in this post.
The Los Angeles Times has come out in favour of Proposition 56, a November ballot initiative which would raise California’s cigarette tax by $2 a pack.
This is the third time California has tried a ballot measure raising its cigarette tax (The State Legislature is too yellow to do it themselves.). A more modest $1 a pack proposal in 2012 lost by less than 1/2 of 1 percent of the vote (It lost by less than 25,000 votes out of 5 million ballots cast) after Big Tobacco spent more than $40 million to defeat it.
Most of the money from this tax increase is specifically earmarked for Medi-Cal.
… tobacco taxes are really a brilliant and beautiful thing: They not only bring in revenue for government but also serve a social good in the process. On average, peer-reviewed studies have shown, a 10% increase in the total price of cigarettes will yield a 3% to 4% reduction in adult consumption — and a 7% reduction among young smokers.
While bringing down smoking rates, the tax also would bring in between $1 billion and $1.4 billion in its first full year — 2017-18 — after which, the revenue would decline slowly as the number of smokers shrinks. Some of the money would go to administration and enforcement of the tax itself; a sizable chunk would go to tobacco prevention and control programs; a portion would go toward research on cancer, heart and lung disease and other tobacco-related diseases. But the bulk of the funds would go to Medi-Cal, the state’s health insurance program for low-income residents — specifically, to pay healthcare providers more to treat Medi-Cal patients.
Many people are surprised to hear this, but California actually has one of the lowest cigarette taxes in the country — just 87 cents a pack. The national average for state taxes is about $1.65 a pack, so California is barely half the national average.
This proposal would jump California from the 37th highest cigarette excise tax in the country to ninth.
Increasing cigarette taxes has been shown time and again to be one of the most effective ways to cut the smoking rate. It gives people extra incentive to quit and kids extra incentive to not start to begin with. I mean, if someone is smoking just a pack a day of cigarettes, with this cigarette tax, quitting would save you $2.87 a day. That’s about $1,000 a year. That’s just one pack a day.
It’s interesting that Big Tobacco would spend so much in California trying to beat it, because California already has one of the lowest smoking rates in the country. But, if the measure cut the smoking rate by just 5 percent … that’s 5 percent coming from the biggest state in the country. That’s maybe 200,000 to 250,000 smokers, multiply that by maybe $1,000 a year they would no longer be spending on cigarettes (and this is for perpetuity) … you start seeing why Big Tobacco cares.
The tobacco industry is already trying to spread lies that the initiative would somehow take money away from schools. From the L.A. Times editorial:
The battle to pass Proposition 56 will be tough, as always, because of the power of the tobacco lobby, which already is making deceptive claims like this one: “Prop 56 cheats schools out of at least $600 million per year.” That’s baloney. Proposition 56 wouldn’t take a penny from schools; it would merely exempt the new tobacco tax revenue from the requirements of Proposition 98, the 1988 measure which guarantees public schools a large share of the state’s core revenues. Many initiatives include such an exemption.
Don’t believe the cynical, disingenuous opponents of this measure. Proposition 56 will save lives. The Times urges a yes vote.
Big Tobacco has already filed bullcrap litigation attempting to get a ballot measure removed from the November 2016 ballot that would raise the California cigarette tax by $2 a pack. And on top of that, the industry is planning to spend at least $17 million in order to defeat the measure.
Big Tobacco spent up to $40 million several years ago to defeat a $1 a pack cigarette tax increase. That measure was defeated in 2012 by an incredibly narrow margin — 50.2 percent to 49.8 percent. It lost by 24,000 votes out of 5.1 million votes cast.
Prop 56 would double that increase to $2.87 a pack. Right now, the state cigarette tax is only 87 cents a pack, which surprising to a lot of people, is one of the lowest state cigarette taxes in the U.S. Yup, tax-happy California is actually in the bottom third for cigarette taxes in the country. The $2.87 a pack tax would be one of the highest in the nation. New York has the highest at $4.35 a pack.
First, the industry filed a suit claiming that proponents of the measure have lied that the measure — Proposition 56 — would actually take money away from schools rather than provide a new big revenue stream for education (estimated to be $20 million a year). The industry is claiming that the title of the ballot measure contains inaccurate information and is therefore against the law.
A hearing was held last week, not much must have happened because I can’t find any news stories about the result of the hearing. According to a letter written to the court by Tom Torlakson, head of Public Instruction for California, the tobacco industry states that “make no mistake, Proposition 56 will not take a dime away from education.” Torlakson calls Big Tobacco’s claims “false and misleading,” “preposterous” and “insulting.”
This LeftofCenter story, not particularly well-written honestly, talks about the measure’s effect on e-cigarettes and how this is one of the reasons Big Tobacco is opposed to it. This is an important point. Prop 56 would not only raise the tax on cigarettes, it would add a tax to vaping products, too. On the Crooks & Liars article about it, some commenters mistakenly state that Big Tobacco is threatened by or competing against the vaping industry. Not really, not as much as a lot of people think. The article is correct that this would hurt Big Tobacco by taxing vaping products. Big Tobacco actually controls 75 percent of the vaping industry. The top three vaping brands on the market are actually owned by RJ Reynolds, British-American Tobacco and Philip Morris. So, yeah, this tax is hitting Big Tobacco in two directions.
Big bucks to fight the tax measure
While this lawsuit apparently didn’t accomplish anything, Big Tobacco has put together a war chest of $17 million to advertise against Prop 56.
From Capitol Public Radio:
Proponents such as Jim Knox of the American Cancer Society’s Cancer Action Network say they’re preparing for an onslaught of opposition.
“This is classic tobacco industry strategy and deception,” Knox said of the cash infusion. “They will spend tens of millions of dollars to confuse and deceive the voters about the deadly nature of their product, as they have been doing for decades.”
Expect the industry to hide behind a bunch of Libertarian anti-tax “choice” bullshit in its advertising. That’s Big Tobacco’s MO.
From the story:
Beth Miller, a spokeswoman for No on Prop 56, says her campaign wants to educate voters about the problems it sees with the cigarette tax. She said it sidesteps requirements that money from new taxes fund schools.
“The proponents claim the tax increase will help people quit smoking. But it really is a tax hike grab by the insurance companies and other wealthy special interests,” Miller said.
The good news is Prop 56 backers have raised $16.6 million themselves to promote the measure.
Polls show roughly two-thirds support for the proposed tax increase. However, the 2012 measure also had strong public support until the tobacco industry spent millions to defeat it.
Prop 56 and marijuana measure
expected to raise $2 billion
One of the arguments in favour of the proposed tax is that it along with a measure to legalize marijuana, would raise $2 billion annually for the state of California.
Currently, California brings in $800 million in tobacco taxes. A state agency has estimated that Prop 56 would generate another $1 billion to $1.4 billion a year for state coffers. While the tax would triple, the revenue would roughly double. That makes sense, because such a huge tax increase would likely drive down the smoking rate.
Additionally, the state is estimating another roughly $1 billion a year in tax revenue from legalizing marijuana. That’s based on revenue increases seen in Colorado and Washington from their marijuana measures (I suspect pot hasn’t been legal in Oregon long enough to get a lot of revenue information).
Good news, bad news on the cigarette tax front. First the good news:
Proponents of raising California’s cigarette tax from 87 cents a pack to $2.87 a pack say they have nearly twice as many signatures as needed to qualify the measure for the November 2016 ballot. They were required to get 545,000 signatures and say they have gathered nearly 1 million.
You might be surprised to know California actually has one of the lowest cigarette taxes in the nation. California has the 36th-highest cigarette tax in the nation and the average state cigarette tax of $1.60 a pack is nearly double California’s tax.
This is partly because even though California has one of the lowest smoking rates in the nation at about 13 percent (I believe Utah is the only state lower), the state represents about 11 percent of the population of the country, so even with a low smoking rate, California represents a huge chunk of the national tobacco market. Big Tobacco spent tens of millions fighting a cigarette tax ballot measures in 2006 and 2012 (a whopping $66 million in 2006 and at least $40 million in 2012). The industry ended up winning in 2012 by the narrowest of margins (literally 50.1 percent to 49.9 percent). Expect Altria and RJ Reynolds to again pour millions into California trying to defeat this measure. If I remember right, that proposed cigarette tax increase in 2012 was only $1 a pack, not two.
And Big Tobacco will fight it, because study after study has shown that an increase in cigarette taxes has a tangible effect of driving down the smoking rate. It simply gives people more motivation to quit and prices a lot of teens out of the cigarette market. California is roughly 10 percent of the cigarette market in the U.S. This freaks out the tobacco industry.
However, California has an ace up its sleeve this time. In addition to public health groups such as the American Heart Association, the American Lung Association and the American Cancer Society, the effort to raise the cigarette tax has some deep pockets of its own to combat Big Tobacco’s spending. Billionaire philanthropist Tom Steyer is helping to bankroll the cigarette tax measure this time around. He’s already chipped in $1 million to fund the petition drive. Several other major groups are spending millions to back the measure.
If the measure passes, it would raise roughly $1 billion a year. That money is specifically earmarked in the ballot measure for MediCal and programs to reduce smoking. Latest polls show 67 percent support for the proposal, but there was a similar level of support in 2012 before the Big Tobacco anti-tax media blitz.
Bad news in Missouri, where a state judge invalidated a ballot measure that would raise Missouri’s dead-last-in-the-nation cigarette tax of 17 cents a pack. The judge ruled that financial estimates of the ballot measure were “insufficient” and “unfair.”
This measure is extremely modest compared to California. Tax increase proponents are proposed a tax increase of only 60 cents a pack — to be phased in over three years — leaving Missouri with a cigarette tax of 77 cents a pack, which would still be one of the lowest in the nation.
From a KSL.com story:
The financial summary prepared by Auditor Nicole Galloway’s office estimates the measure would generate between $263 million and $374 million annually. That largely would go to early childhood education; smaller portions would go to early childhood health programs and anti-smoking programs for youth and pregnant women. The financial summary said the impact to local governments was unknown.
Green struck down the financial summary for two reasons: The estimate on state revenues failed to account for the fact that people may buy fewer cigarettes as the price rises, resulting in an “unreasonably high” revenue projection, and the summary should have noted the potential costs to local governments due to a possible decline in cigarette sales.
The financial summary appeared on the petitions people signed and also would appear on the ballot.
“I collected signatures myself. Nobody really ever asked about that” financial estimate, said Linda Rallo, executive director of Raise Your Hand for Kids. “They are more interested in seeing that we don’t adequately invest in early childhood education. … A lot of folks, too, think our cigarette tax is too low and would like to see that raised.”
An appeal of the decision is planned. A competing measure is being backed by the Missouri Petroleum Marketers & Convenience Store Association. This would only raise the cigarette tax by 23 cents a pack — again gradually — and would raise about $100 million annually.
Missouri is one of the most tobacco-friendly states in the country. In addition to its ridiculously low cigarette tax, Missouri has no statewide smoking ban. It also, not coincidentally, has one of the highest smoking rates in the nation at 20.6 percent (compared to a national rate below 17 percent). Missouri also has the third-highest rate of lung cancer in the country.
The West Virginia State Senate last week approved by a 17-16 vote to increase its cigarette tax by 45 cents a pack. Get this, most of the Republicans voted for the tax increase, while most of the Democrats voted against it. Why? Because the tax increase wasn’t big enough.
Like Missouri, West Virginia has a very low cigarette tax at only 55 cents a pack. Republicans are proposing making it an even $1 to help make up a $270 million budget deficit. The measure would raise an estimated $78 million a year. West Virginia may have to shut down its state government in July if a budget cannot be passed.
Democrats want to raise the tax by $1 a pack to $1.45, which would raise $115 million a year.
The proposed tax increase goes to the State House, where it faces a tough fight from a coalition of Republicans who oppose any tax increase and Democrats who want to see a bigger increase.
West Virginia has the highest smoking rate in the nation at 26.7 percent. Because of the high smoking rate and the coal industry, West Virginia also has the second-highest rate of lung cancer in the country.
California is the latest entity — and the biggest — to raise the age for buying cigarettes and vaping products to 21 (There’s a misunderstanding here, it’s not against the law for 18-year-olds to smoke or vape … it’s against the law to sell products to people under 21 now.).
This is one area where I’m not 100 percent on board with the rest of the tobacco control community. There is a part of me that thinks when you’re 18, you can vote, join the military and go to prison for committing a crime; you’re considered mature enough to vote and do prison time, but not smoke? I’m still struggling with this, though virtually the entire rest of the tobacco control community is in favour of it. The American Heart Association, the American Cancer Society’s Cancer Action Network (the group’s advocacy affiliate), the American Lung Association and the president of the California Medical Association all came in favour of the California law.
Interestingly, I think lawmakers in California listened to some of these concerns. People in the military between 18 and 21 are exempted from the law (though I need to follow up later on a story that the military is cracking down on tobacco sales on its bases.).
California now joins Hawaii and New York City and a few other places that have raised the age for buying tobacco from 18 to 21.
Perhaps this will be effective in stopping kids from not only smoking but vaping. One reason I remain a bit skeptical about how effective this law will be is most kids don’t start smoking or vaping after they turn 18; most of the time they start when they’re 13 or 14 years old. Maybe it will be harder for their 18- and 19-year-old friends or siblings to buy their tobacco products for them. We’ll see. If the teen smoking and vaping rates go down in five years because of these laws, I’ll be more
“[These laws] will save countless lives, reduce astronomical costs to the health care system, and cost very little because it uses existing enforcement mechanisms,” said Senator Ed Hernandez, who authored the bill to raise the age of tobacco products. “Today was an enormous victory for not only this generation, but also for many generations to come who will not suffer the deadly impacts of tobacco.”
One thing I like is that the bills Gov. Jerry Brown signed also prohibit the use of e-cigs in public buildings, even in bars.
The e-cigarette is nothing more than a new delivery system for toxic and addictive nicotine,” State Sen. Mark Leno said Wednesday. “Ensuring that e-cigarettes fall under California’s comprehensive smoke-free laws is critical to protecting public health, especially given the alarming rate at which young people are picking up these devices.”
What I like most about the law is that it actually makes it a criminal offence — a misdemeanor, not a citation — to sell or buy cigarettes or vaping products for underaged users. Basically, the same as alcohol. That should put a dent in retailers selling vaping products to teens.
The California State Assembly approved a bill this week to raise the state’s smoking age from 18 to 21. A number of cities and states have been doing this the past couple of years. I’ve on record as having a somewhat mixed view of this — 18-year-olds can vote, join the military and go to jail, but they can’t buy a pack of cigarettes? I get it that they can’t buy alcohol, but alcohol is an intoxicant.
Again, there is a big, big push going on to raise the smoking age to 21, and most of the tobacco control movement is behind it. Maybe I’m behind the times on this. Whether I’m fully on board or not, this movement is gaining steam. The bill would prohibit stores from selling cigarettes to young adults between 18 and 20, but there would be no penalties for young adults for possession or using tobacco. I’m cool with that.
Young Bay Area residents had mixed reactions to the legislation.
“I’ve been smoking ever since my mom put my first cigarette into my hands at age 13,” said Juan Parada, a hip hop musician taking a smoking break Thursday in downtown San Jose. Now, at 21, he declares, “I know that each time I take a puff, I am killing myself slowly.”
Yet Parada, who performs under the moniker “Young Manny,” said increasing the smoking age to 21 will have little effect.
“Kids will find a way to get what they want — like getting an older person to buy cigarettes for them,” he said. “That’s what I did. That’s what lots of young kids do, and it’s just not that difficult.”
I guess my response to that is … your mom was giving you cigarettes when you were 13? … no offense, dude, but your mom is an idiot.
However, I was more intrigued by another bill that also passed the Assembly — regulating e-cigarettes. Much overdue, in my opinion. The bill would treat e-cigarettes as a tobacco product, it would ban e-cigarette use in all workplaces and would require people selling e-cigarettes to get a special licence. It also would make it a misdemeanor to sell or provide vaping products to people under the age of 21 (I like this part of it because vaping has absolutely skyrocketed among teens in the past three years.). It doesn’t sound that strict, but it’s a beginning. We’re all still waiting for the Food and Drug Administration federal regulations for e-cigarettes, so states are having to pass their own regulations.
These bills had been proposed in earlier years but got bogged down to a large degree because of lobbying from the tobacco industry. I found a couple of stories about just how powerful the tobacco lobby is in California. You’d be surprised to hear that California actually has one of the lowest tobacco taxes in the whole country — just 87 cents a pack. The Legislature simply will not pass a tobacco tax increase and tobacco industry lobbying is a reason why. California alone represents nearly 10 percent of the cigarette market in the entire country.
Major tobacco companies Philip Morris and R.J. Reynolds spent $1 million lobbying lawmakers in 2015. R.J. Reynolds also gave $240,000 to candidates and campaign committees last year, while Philip Morris contributed $1 million, including $200,000 to the California Republican Party.
Democrats who voted against or abstained on the tobacco measures received at least $26,000 from the two companies last year. In November and December, they gave a combined $35,000 to a ballot committee run by Assemblyman Adam Gray, a Merced Democrat who chairs the influential Governmental Organization Committee and voted against raising the smoking age to 21.
The two Republicans who voted for the bill, Catharine Baker of Dublin and David Hadley of Manhattan Beach, returned almost $11,000 in contributions from the tobacco companies over the summer.
In remarks to reporters after the vote, Assembly Speaker-elect Anthony Rendon, D-Lakewood, called the tobacco industry “a strong force in this town” and alluded to “threats involving electoral efforts” against legislators.
“It’s exceptionally aggressive,” Rendon said.
Both bills go to the State Senate, where they are expected to pass.
A ballot measure to raise California’s cigarette tax by $2 a pack is being proposed. The last similar ballot measure (Again, the Legislature won’t approve a cigarette tax measure, so it keeps getting punted to the voters) in California failed by just a few thousand votes after Big Tobacco spent millions to defeat it. However, this ballot measure is being proposed for November, when voter turnout is expected to be very heavy, in part because there will be another ballot measure to legalize pot in California.
An interesting story about a report put out by California State University, San Francisco (co-authored by anti-tobacco advocate Stanton Glantz) warning that legalized marijuana could become the next “Big Tobacco” because it would create a massive, wealthy and politically powerful economic behemoth.
Here is a copy of the 66-page report. , In reading the Sacramento Bee article about it, Glantz and the report are arguing that with legalized pot and the billions of revenue it would create would also create a very powerful marijuana lobby. A lobby that would likely throw its weight around politically and could ultimately become a subsidiary of the tobacco industry, possibly to the detriment of public health policy.
From the article:
“Evidence from tobacco and alcohol control demonstrates that without a strong public health framework, a wealthy and politically powerful marijuana industry will develop and use its political clout to manipulate regulatory frameworks and thwart public health efforts to reduce use and profits,” the report states.
Glantz, in an interview added:
“The goal (should be) to legalize it so that nobody gets thrown in jail, but create a legal product that nobody wants,” he said.
He worries that a new marijuana industry would spend large sums of money to curry favor with lawmakers.
“I think a corporate takeover of the market … is very, very hard to stop,” he said, adding, “They are already a potent lobbyist in California.”
I’m not necessarily agreeing with the report, and honestly, I found parts of it a bit alarmist. But, the concerns about marijuana monopolies and Big Tobacco involvement in the industry are valid. I have posted other articles about Big Tobacco eyeing the legalization of pot very carefully, with the very real potential of today’s tobacco companies swooping in and taking over the legalized pot industry. Keep in mind, this has already pretty much happened with e-cigarettes. RJ Reynolds bought out the No. 1 e-cigarette brand — Blu E-cigarettes, which controls about 40 percent of the E-cigarette market — and there are a number of other e-cig brands owned by tobacco companies. Big Tobacco isn’t in competition with e-cigs, not anymore. When in doubt, buy ’em out.
Tobacco is a dying product, especially in the West, while both e-cigarettes and marijuana are booming. Pot is likely to boom even more as it’s legalized in more states and Canada. If California legalizes pot in November, that state alone probably represents over 10 percent of the pot market in the U.S. Now tack onto that Washington, Oregon, Alaska, Colorado and perhaps a few other states (legalization seems likely in Nevada, soon), plus another 35 million people in Canada if Trudeau goes through with his promise to legalize pot nationwide. I just have to imagine the people at RJ Reynolds, British American Tobacco and Philip Morris are absolutely drooling over the prospects of getting into that market. That’s over 90 million people in North America living under legalized pot laws as early as 2017.
One of the things I like about one of the California pot legalization measures is that it would allow people to legally grow up to six plants. I haven’t taken the time to research how many plants a person could legally grow in Washington, Oregon or Colorado, but I think it’s important that if pot is legalized that people still be allowed to grow a small amount of their own pot, so it doesn’t quickly and completely become a corporate-run industry. You want to keep RJ Reynolds and Philip Morris or some other monopoly out of the pot business? Let people grow their own pot, and take other steps to prohibit any corporation from getting more than a certain market share and make sure it stays in the hands of small businesspeople.
And there is a paranoid X-Files side of me that is convinced there are people within Big Tobacco that have thought about, dreamed about, maybe even started doing the work on … how to add nicotine to marijuana. Seriously, think about it. Marijuana with arguably the most addictive substance on the planet added. It would be like Spice in “Dune.”
The report states that pot should be regulated much like tobacco. Instead, the California proposal calls for regulations similar to alcohol. From the article:
One of the (measure’s) proponents, Donald Lyman, a retired physician and a former state public health official, said the notion that marijuana must be regulated exactly like tobacco “represents an awkward minority opinion not widely shared within the public health community.”
I have to agree with Lyman here. For one, there’s some actual medical benefits to pot. I think the medical benefits of pot gets overstated by some pot proponents, but there’s legitimate medical uses as a painkiller and to control seizures. There is NO legitimate medical use for tobacco. While it can become habit-forming for some people, marijuana also is not physically addictive anything like tobacco, nor is there any evidence that marijuana causes lung cancer or even COPD. You simply can’t treat pot and tobacco like the same product. Probably the most similar product to pot would be beer or wine (and yes, there are rumours that not only is Big Tobacco drooling over legalized pot, the beer industry has interest in getting into the pot business as well).
One of the California measures would prohibit monopolies and large-scale pot licences for five years. Co-author of the report Rachel Barry, says five years isn’t enough. From the article:
“I am thinking more in 20 years what the industry will evolve into, not five years,” Barry said. “And that’s something we should be doing with the regulations.”
One marijuana legalization proponent sees some validity in some of the report’s concerns, but said that most of these issues are being dealt with in the language of the California measures.
From the article:
Abdi Soltani, executive director of the ACLU of Northern California and a member of the (Calif. Lt. Gov. Gavin) Newsom commission’s steering committee, said he agrees with some of the concerns raised in the report but ultimately believes the initiative protects the public.
“My middle school child will not walk into a corner store where tobacco and alcohol are marketed and see marijuana for sale,” Soltani said.
You might not believe this, but cigarette taxes in California are among the lowest in the entire U.S.
California’s cigarette tax is only 87 cents a pack, which is barely half of the average $1.50 a pack state tax in the U.S. California has the 35th-highest state tobacco tax rate in the nation. A number of states have cigarettes taxes well over $2 a pack. California has a reputation for having high taxes, so what’s behind this?
What’s behind this is California also represents all by its lonesome, nearly 10 percent of the cigarette market in the entire U.S. So, anytime there is a proposal to raise cigarette taxes in the state, Big Tobacco fights it to the bloody death. The California State Assembly refuses to raise cigarette taxes, so a ballot measure was proposed to raise taxes in 2012 by a pretty reasonable $1 a pack. The measure failed, barely (50.2 percent against, 49.8 percent in favour). A bit weird, since California has one of the lowest smoking rates in the nation (less than 15 percent).
I was a bit shocked when the measure failed, since cigarette tax increases have passed by voter imitative in other, less-liberal states than California (including in Libertarian Montana, where voters approved a $1 a pack increase many years ago.) However, the measure was put on the ballot in a primary election, where turnout is not that good. And Big Tobacco spent millions to defeat it. According to this article, Big Tobacco spent $38.7 million to defeat the measure in 2012. Wow, that’s a lot of money … but keep in mind, California with its 38 million people is nearly 10 percent of the tobacco market in all of the U.S. And studies have shown that higher cigarette taxes help drive down the smoking rate.
So, now tobacco control proponents are back with a proposal for a $2 a pack tax increase. They’re gathering signatures and this time, they aren’t screwing around with a primary election date, they’re shooting for a general election date, when turnout is much higher. (Interestingly, there will also likely be a measure on the November 2016 ballot to legalize pot, which seriously should bring out a lot of younger voters … younger voters who don’t smoke cigarettes.)
This proposal would give California the ninth-highest cigarette tax in the nation. However, it will be on the November 2016 ballot, not a primary or special election ballot, so turnout is expected to be much heavier, which bodes well for passage. This article claims a poll shows 2-to-1 supprt for raising cigarette taxes.
Billionaire Tom Steyer is co-chair of the proposal. He says his mother smoked three packs a day and died of lung cancer. Also backing the measure are Tom Torlakson, the state superintendent of public instruction, the American Cancer Society, the American Heart Association, the American Lung Association and the California Medical Association.
The proposal would also add taxes to e-cigarette products. The proposal needs to gather more than 500,000 signatures to place it on the November 2016 ballot.
I know this will surprise a lot of people, but California actually has one of the lowest state cigarette taxes in the U.S. Californians only pay 87 cents a pack on cigarettes, while the average state cigarette tax in the country is $1.60.
California legislators a couple of years ago chickened out and punted the issue of raising cigarette taxes to the voters and after Big Tobacco poured millions upon millions into fighting the ballot measure, The measure, Proposition 9, failed by a vote of 50.3 percent to 49.7 percent in 2012. That measure would have raised state cigarette taxes from 87 cents a pack to a still-very-reasonable $1.87 a pack.
The tax proposal is part of a special session being considered by Gov. Jerry Brown to raise funds for crumbling infrastructure and health care needs in California. A proposed raise in the state gas tax would go toward fixing roads and bridges in the state and a proposed cigarette tax increase (up to $2 a pack) is being considered to help with Medicaid and other health care costs
According to the San Jose Mercury News, cigarettes contribute $18 billion a year to health care costs in California. This information comes from UC-San Francisco, where my hero Stanton Glantz, a pioneering tobacco control scientist, is a professor.
It still blows my mind that California has one of the lowest cigarette taxes in the entire country — only a handful of states, mostly in the Deep South, are lower. In a few weeks, California in one fell swoop could become one of the most expensive states in the country to buy cigarettes.